Start freelancing and not everything in life gets better. We do get to work from home and set our own schedules. We’re around when the kids finish school and we’re free to hunt down the jobs we want to do. All of those things are a big improvement over the 9-to-5. But some things get considerably worse. The income is unstable. We have to find our own work. And there are taxes.
Of course, there are always taxes, but when your income changes from month to month and when every receipt has to be kept and filed in case it’s deductible and an auditor wants to see it, the paperwork involved in freelancing can be horrendous. The bookkeeping takes organization and it takes time. It’s not only dull, tedious and a long way from fun, it takes valuable hours away from the work we’re actually being paid to do. Do your booking badly and it will cost you money; do it properly and it will still cost you money. It was to give freelancers and entrepreneurs those billable hours back that when Taylor Mingos graduated from Duke University in 2007, he launched Shoeboxed.
“Shoeboxed set out to be (and has become) the bridge between the pile of physical receipts on your desk and an organized and online IRS-accepted archive of your financial information that is accessible at your fingertips anytime, anywhere,” explains Jake Brereton, Shoeboxed’s Marketing Manager. “At the end of the day we strive to take the work out of paperwork so that our customers have more time to spend doing what they love to do.”
The service works a little like a taxman’s Netflix. Shoeboxed sends members prepaid envelopes into which they can place their receipts. The envelopes are then mailed back to the company which scans the invoices and extracts the information they contain into the member’s account. Although OCR technology is used to ensure accuracy, each receipt is also hand-checked to make sure that users aren’t accidentally claiming more than they should or leaving money behind. Users can then view the data online, edit and annotate it and incorporate the tables into most tax preparation software, including QuickBooks, Quicken and Outright.
The envelopes are the most popular way that users get their physical receipts off their desks and into their desktops but Shoeboxed makes a point of accepting just about any method that works. Free uploaders both online and on the computer make it possible to scan receipts and drop them into the account; electronic receipts can be forwarded to a personal Shoeboxed email address; and it’s even possible to snap a picture of an invoice with a smartphone and move the data immediately into your records. Users can choose whether they want to receive the invoices back (for storage in a real shoebox) or let Shoeboxed shred and recycle them.
The system has proved remarkably popular. The company serves over 100,000 customers in more than 100 countries. Although it can’t say how many invoices that represents, the number of small pieces of paper that have been scanned, checked and added to databases reaches “well in the millions.”
Most of the company’s customers are owners of small businesses, professionals and, in particular, freelancers whose businesses are too small to hire bookkeepers or assistants but would like to outsource the paperwork to someone else.
The benefits can certainly be impressive. In a video testimonial, videographer Chad Owen paints a familiar picture of chaotic receipt keeping, lost bits of paper and deductions that could have been made but which were left behind the desk or at the bottom of the drawer. Jake Brereton recalls a conversation with a freelance client who said that using Shoeboxed put as much as two entire workdays back into the month.
“I spoke to someone last week who said that he thought our service was literally saving him three to five hours a week,” he says. “I think you’d be hard pressed to find anyone who doesn’t want to put three to five hours back in their week, especially if they’re a freelancer and these three to five hours could be billable hours of quality work time.”
Services like these aren’t entirely original. Bookkeepers have long existed to offload the pain of keeping an orderly desk on which receipts are filed and easily retrieved instead of chucked and lost. But few bookkeepers are willing to work for $29.95 a month and when they do work, only they — and not their clients — have access to their files.
That does sound like Shoeboxed is bad news for at least one kind of freelancer: those who keep the books for other freelancers. In fact though, according to Jake Brereton, the service is popular with bookkeepers too, saving them the hassle of data entry while letting them keep an eye on their clients year round and making sure that everything is ready at tax time.
There’s no question then that services like Shoeboxed’s have value. In allowing freelancers and other professionals to outsource one aspect of their work to an automated service, they’re able to remove a giant headache from their business and free up more time to spend on the tasks that really do bring in money. The question that freelancers should be asking though is what else could they be outsourcing?
It’s a question that Shoeboxed has been asking too. The company is expanding from invoices to business cards, bills and just about any other document that users want to send it. But freelancers should be looking at their own activities and counting up the hours not spent producing billable work.
Outsourcing client acquisition might be difficult. Pitches should really be tailored and hand-made rather than cut and pasted into every advert. But newsletters could be replaced by an autoresponder or written by a copywriter instead of crafted yourself at the end of every month. Blog posts can be bought in and online advertising could be managed by an assistant instead of tracked every morning when you could be making headway on a new project.
Starting with a service like Shoeboxed might be valuable. But the biggest benefit might come when you keep going.